Companies often associate competition rules with public enforcement. However, competition law can also be a source of compensation. The new French Order and Decree, which together implement Directive 2014/104/EU on actions for damages for infringements of competition law provisions, simplify the task victims of infringements of competition law face when they claim damages by creating a number of presumptions in their favour.
Competition authorities, including the French Competition Authority (the FCA), impose increasingly heavy fines on companies that infringe competition rules. In parallel to this, private claims aimed at repairing the harm suffered by the victims of anti-competitive practices exist, but until now such claims have not been made to the extent possible.
However, a framework for private claims for damages in France has now been provided by Order No. 2017-303 of 9 March 2017 (the Order) and its supplemental decree (the Decree).
These rules are aimed at increasing the efficiency of private enforcement of competition rules and, therefore, ensuring full compensation of the victims of anti-competitive practices. However, they also try to set an appropriate balance between such private enforcement and effective public enforcement of competition law by competition authorities.
Proof of infringement
Anti-competitive practices are irrefutably presumed to be established for the purposes of an action for damages when they are found to exist by a final decision of the FCA (i.e., the decision has been confirmed by the Paris Court of Appeal or has not been subject to a request for annulment) or by the EU Commission.
Decisions of other Member States’ competition authorities can be used as prima facie evidence of anti-competitive behaviour.
It is presumed under this regime that cartel infringements cause harm, although this presumption is rebuttable by the cartelists.
The Order also states that the harm suffered by a victim can include (i) any loss incurred (mainly as a result of overcharges); (ii) any loss of profit; (iii) any loss of opportunity; and (iv) any non-financial loss.
Damages are assessed on the day of the decision and must take into account all circumstances affecting the value of the loss suffered. It includes the time that has elapsed since the loss occurred and, therefore, any interest due since then.
The sole provision on the quantification of damages is provided by the Decree. French courts may ask for the FCA’s opinion on such quantification; however, the FCA is not required to respond to the courts’ request.
Opening a way for the FCA to express an opinion on the quantification of damages represents a surprising and innovative approach, one which may generate lively debate as it raises the question of the connection between the quantification of the harm suffered and the analysis of the damage to the economy by the FCA. Until now, the damage to the economy has always been strictly distinguished from the harm suffered by the victims of anti-competitive practices.
Direct or indirect purchasers are now presumed not to have passed on any overcharge to their own customers. This presumption can, however, be rebutted by the defendant. This puts an end to previous and contradictory French case-law on this issue.
Joint and several liability
Infringing companies will be held jointly and severally liable to repair the harm suffered in proportion to the gravity of their respective offences. However, the Order provides for exceptions for small and medium-sized companies, as well as leniency applicants.
Disclosure of evidence
The rules regarding the disclosure of evidence are aimed at balancing the right of victims of anti-competitive practices to be fully compensated, on the one hand, and, on the other hand, the protection of confidential information and requirements to ensure successful public enforcement by competition authorities.
A judge may now order the communication not only of identified pieces of evidence but also of categories of evidence, whereas previously only access to specific documents could be granted. Prior to the Order, the disclosure of evidence by the FCA was already subject to conditions, as the FCA could refuse to disclose leniency documents and evidence which could reasonably be provided by a party to the damages proceedings.
The Order now provides that a court cannot order the FCA, the European Commission or any competition authority of another Member State to disclose evidence if a party to the proceedings or a third party may reasonably provide this evidence. In addition, disclosure of evidence cannot be ordered until the proceedings before the competition authority are terminated.
Regarding a party’s disclosure of evidence from a competition authority’s files, it seems that existing case-law will continue to apply, i.e., the French judge will assess on a case-by-case basis whether the disclosure is necessary to ensure the rights of defence of the party making the disclosure are protected.
Finally, judges cannot order the disclosure of written statements, or transcripts of oral statements, made by a leniency applicant or by any party that does not seek to dispute the objections of the FCA against it. However, if the judge needs to examine this evidence, they can do so without communicating it to the other parties to the proceedings. This prohibition is narrower than under previous rules, which covered all leniency documents.
The five-year limitation period complies with general rules under French civil law.
The Order provides further clarification regarding the starting point of the limitation period, i.e., the time when the victim becomes aware of, or ought to have become aware of (i) the facts giving rise to the relevant anti-competitive practice and the nature of that practice; (ii) the fact that the anti-competitive practice has caused harm; and (iii) the identity of at least one of the companies responsible for the practice.
In addition, the limitation period starts only if the anti-competitive practice has ended.
The limitation period is interrupted by any act of the FCA carried out for the purposes of investigating, establishing or sanctioning the relevant anti-competitive practice.
Entry into force
The Order entered into force on 11 March 2017. However, the provisions regarding disclosure apply retroactively to proceedings brought on or after 26 December 2014.